Report: Apple Pays $100 Million to Labels for iCloud

Apple has reportedly paid the major labels over $100 million in advance royalties for the right to unveil Apple iCloud on Monday (photo of Apple's North Carolina data center courtesy of Google Maps).

Music insiders have long known that starting any sort of large-scale music distribution service requires big upfront payments to the major labels, in the form of cash or equity in the service — see MySpace Music, Vevo, Imeem, and Spotify.

Now, three sources (we guess from the labels themselves) have reportedly indicated to the New York Post that Apple paid major labels advances totaling over $100 million for the right to launch whatever music service Steve Jobs and company plan to unveil on Monday.

As a result of these licenses and agreements with music publishers, Apple iCloud will allow people who purchase music downloads from iTunes to replicate those songs — and most likely music obtained in other ways too, such as from MP3 blogs, bit torrent, Amazon MP3, and CDs — to a storage locker in “the cloud.” In this case, the cloud means servers in Apple’s new data center in North Carolina (view in Google Maps).

The iCloud music service will be free to use for an initial period for iTunes music store customers, after which it will run music fans $25 per year, according to the LA Times. In addition to the music locker that we assume will be stream music on-demand to iPhones (and other iOS devices), Apple TV, Macs, and PCs, some say iCloud will include other cloud services too, essentially replacing the MobileMe service that Fortune says Steve Jobs hates.

Those of us who live in New York know the Post for its outrageously funny headlines, but staffers at the paper also live to report the inner-goings-on of the New York big media world — and that world includes the major labels. Besides, this $100 million-plus figure is consistent with previously reported advances, so we’re inclined to believe the report.

On Monday, the rumor and speculation will end, as the world finds out what Apple has really been working on all this time — and whether we want to use it to play our music.